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Twenty Years after NAFTA, Mexico Has Experienced Lagging Growth, Persistent Poverty and Increased Unemployment

February 12, 2014

Most U.S. Workers Likely to Lose Out from Proposed Trans-Pacific Trade Agreement, Report Finds

September 10, 2013

CEPR Co-Directors Call on Federal Reserve to Intervene in Spanish Bond Market
June 4, 2012

Obama Administration’s Nomination of Jim Yong Kim for World Bank President is a Victory for Reform, CEPR Co-Director Says
March 23, 2012

CEPR Co-Director Welcomes Jeffrey Sachs' Reform Candidacy for World Bank President
March 1, 2012

Debt, Deficits, and the Dollar: 7 Key Facts
June 16, 2011

Appointment of Stanley Fischer to Head the IMF Would "Institutionalize Lack of Accountability," CEPR Co-Director Says
June 13, 2011

Brazilian Macroeconomic Policy Needs New Debate, Says CEPR Paper
June 2, 2011

New Report Looks at Economic Growth Rebound for Low- and Middle-Income Countries Over the Last Decade
April 14, 2011

Private, Opposition TV Continues to Dominate in Venezuela, New Paper Finds
December 13, 2010 En Español

New Paper Finds Big Increase in Trade is Transforming Colombian-Venezuelan Relations
November 16, 2010 En Español

New Paper Finds IMF Policies are Increasing Risks to Economic Recovery in European, Other Countries
October 21, 2010

Venezuelan Recession Likely Ended in Second Quarter
September 3, 2010 En Español

IMF's Economic Growth Projections for Latin America and Caribbean Appear Questionable
April 28, 2009

Attempt to Convene Last-Minute WTO "mini-Ministerial" Collapses In the Midst of Global Recession
December 12, 2008

New Report Shows Need for Rapid Debt Cancellation for Haiti in Wake of Recent Disasters
December 8, 2008

New Paper Finds That Oil Price Decline Doesn't Threaten Venezuelan Economic Growth
November 18, 2008

Obama Has Historic Opportunity to Improve Ties With Latin America
November 6, 2008   En español

Are You Better Off in 2008 Than You Were in 2000?
September 25, 2008

WTO Talks Collapse Amidst Developing Countries' Reluctance to Sacrifice Food Security
July 29, 2008   En español

WTO Negotiations Face Significant Challenges: CEPR Analysis
July 17, 2008

CEPR Paper Responds to Foreign Affairs on Venezuela
March 21, 2008

U.S. Recession Will Hurt Major U.S. Trading Partners, Projections Show
March 6, 2008

Delayed Debt Cancellation Will Only Hurt Haiti, New CEPR Paper Finds
December 12, 2007

Lessons from Argentina: New Paper Looks at Economic Policy in Argentina's High-Growth Recovery
October 24, 2007   En español

New CEPR Paper Looks at Sustainability of Exchange Rate Targeting and Sterilization
September 25, 2007    En español

New Article Examines the Impact of the Asian Financial Crisis After Ten Years
August 7, 2007

Holding the World Bank Accountable for its Research: The Case of NAFTA

The World Bank and NAFTA 

Holding the World Bank Accountable for its Research:
The Case of NAFTA

Mark Weisbrot 

May 24, 2007 

Timeline

The recent controversy that led to the resignation of World Bank President Paul D. Wolfowitz highlighted the lack of accountability at the World Bank. But it is not only its governance that suffers from the fact that the Bank, with 185 member nations, is ruled primarily by the U.S. Treasury Department. There are also serious problems with the Bank's research.

Last year, the World Bank established a panel of economists to evaluate its research from 1998-2005, including nearly 4,000 papers, books, and reports. Among other problems, the panel had "substantial criticisms of the way that this research was used to proselytize on behalf of Bank policy, often without taking a balanced view of the evidence, and without expressing appropriate skepticism."

But sometimes the problems are even worse, as when the Bank publishes erroneous research results, which influence important policy debates, and then refuses to correct its errors. The Center for Economic and Policy Research (CEPR) has tried to hold the Bank accountable for its research. In December 2003, the World Bank released a paper which purported to show that NAFTA had a positive influence on Mexico's economic growth. The paper was timed and indeed, rushed — to have an influence on the political debate. It was released on the final day of the CAFTA negotiations and coordinated to coincide with the 10th anniversary of NAFTA (January 2004), which brought a spate of newspaper articles on the agreement's impact.

The World Bank's results, now shown to be erroneous, influenced the public debate. For example, they were cited by a Washington Post column in December 2003 and the Washington Post editorial board in January 2004, in support of the newspaper's arguments for CAFTA. In March 2004, CEPR responded with a paper that highlighted errors in the paper that negated its results.

The correspondence and papers below, between CEPR and the World Bank, explain the details of the Bank's errors and why they matter. The bottom line is that, because of uncorrected errors in the Bank's analysis, their econometric results cannot support the claim that NAFTA had a positive effect on Mexico's growth rate. As of today, May 24, 2007, the Bank has still not retracted its conclusion or corrected this mistake.

Timeline

December 2003 — The World Bank publishes NAFTA and Convergence in North America: High Expectations, Big Events, Little Time (as Chapter 1 of Lessons from NAFTA for Latin America & the Caribbean).

March 2004 — CEPR publishes NAFTA at Ten: The Recount, which explains problems with the World Bank's methodology in NAFTA and Convergence in North America.

April 2004 — The World Bank posts a second version of NAFTA and Convergence in North America.

May 2004 — The World Bank posts a third version of NAFTA and Convergence in North America.

October 2004 — CEPR publishes Getting Mexico to Grow with NAFTA: The World Bank's Analysis, which explains the World Bank's methodological problems and errors that were not addressed in its subsequent versions of NAFTA and Convergence in North America.

November 2006 — The World Bank publishes The World Bank's Research on Trade Policy, 1998-2005: An Evaluation in which UCLA economist Sebastian Edwards reviews Lessons from NAFTA for Latin America & the Caribbean.

January 2007 — CEPR sends letters to Sebastian Edwards and François Bourguignon (World Bank's Chief Economist) reiterating the original concerns with NAFTA and Convergence in North America and asking for a correction.

March 2007 — CEPR receives a reply from the authors of NAFTA and Convergence in North America, and from Bourguignon, who defers to the authors.  The reply defends thepaper and does not acknowledge any errors.

April 2007 — CEPR responds, explaining again the errors that negate the World Bank paper's conclusions, and once again asking for correction.

 

For more information, please contact Dan Beeton at 202-293-5380 x104. 

 

IMF's Support for Coup Government in 2002 May Have Influenced Venezuela's Decision to Withdraw

May 1, 2007
En español

Economists Analyze Argentina's Economic Expansion at 5 Years
April 10, 2007

New Report Raises Doubts About IMF Growth Projections
April 4, 2007

New Book Explains Right Turn in US Politics Since 1980
April 3, 2007

Over 40 Million Jobs - 1 in 3 - Pay Low Wages
March 15, 2007

Job Growth Weak in January, Despite Good Weather
February 2, 2007 (Jobs Byte)

Union Rates Fall in 2006, Severe Drop in Manufacturing
January 25, 2007 (Union Byte)

One-fifth of Union Activists Illegally Fired During Unionization Campaigns
January 4, 2007

What Will A Second Term For Lula Look Like?
September 22, 2006    En español

New Report Projects Shrinking Market For U.S. Imports
July 11, 2006

Bolivia Faces Good Prospects for Economic and Social Reform
March 14, 2006 En español

Costs of WTO 'Development Round' Could Outweigh Benefits for Developing Countries
December 15, 2005

World Bank's Claims on WTO Doha Round Clarified
November 22, 2005

Economists Document Long-Term Growth Fall-Off for Developing Countries
September 21, 2005

Statement: Economic Arguments Surrounding CAFTA Remain Misunderstood
Statement by Mark Weisbrot, July 14, 2005

Experts Available for Interviews on IMF/World Bank Issues
April 14, 2005

Poor Country Gains from Trade Greatly Overstated
November 18, 2004

Can Developing Countries Afford to Hold Dollar Reserves?
September 29, 2004

Alternative Economic Policies Would Aid Development
August 3, 2004

International Forum for Development Examines UNCTAD 2004 LDC Report
July 14, 2004

Public Misconception #103 : Bad Sources on "Insourcing"
Statement by Dean Baker and David Rosnick
March 24, 2004

Study Finds Solution to Deficit Woes Through Buying Into Foreign Health Programs
March 2004

NAFTA at Ten: World Bank Study Found to be Flawed
March 1, 2004

Argentina’s President Kirchner Arrives Tonight for Meeting with President Bush
July 22, 2003

One Year after Seattle: Globalization Revisited

November 27, 2000

New Report from CEPR Examines International Growth Slowdown In the Era of IMF Influence
September 25, 2000


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